European shares fall as ECB starts buying bonds

* EDF dips again on worries over potential tie-up with Areva (Updates prices at settle)

By Blaise Robinson and Alistair Smout

PARIS/LONDON, March 9 (Reuters) - European shares fell on Monday with investors booking recent lofty gains as the European Central Bank begins its programme of bond purchases, aimed at reviving inflation and economic growth.

The market has rallied strongly since the start of the year, with the FTSEurofirst 300 surging over 14 percent in the run-up to the ECB's quantitative easing programme, under which it will buy 60 billion euros ($65 billion) a month of bonds.

"It's 'buy the rumour, sell the news'. European stocks have jumped 15 percent since the start of the year and the positive impact from QE has broadly been priced in by now," Saxo Bank trader Pierre Martin said.

"(With) doubts over when the Fed will start raising rates, people are tempted to just book profits."

The drop in European stocks on Monday mirrored a sell-off on Wall Street on Friday, where strong U.S. jobs data fanned expectations that the Federal Reserve may raise interest rates sooner than previously thought.

The FTSEurofirst 300 index of top European shares closed down 0.2 percent at 1,567.09 points, slipping from a seven-year high hit last week.

Greek banking shares were among the biggest losers, with Bank of Piraeus down 12.4 percent and Eurobank down 11.3 percent lower as euro zone finance ministers met to discuss reforms pledged by Athens.

The head of euro zone finance ministers urged Greece on Monday to "stop wasting time" and buckle down to serious talks on implementing a reform programme to secure urgently needed fresh funds from its international creditors.

"Maybe the market shrugged Greece off too quickly after the initial deal, as clearly there is still much to discuss," Jeremy Batstone-Carr, market analyst at Charles Stanley, said.

Investors were also rattled by data from China showing a slide in imports, while the Bank of France cut its growth forecast for the French economy for the first quarter to 0.3 percent from 0.4 percent.

Shares in European property groups also retreated. Unibail and Klepierre fell 1.7 percent and 2.2 percent as traders cited a downbeat research note by JPMorgan. The bank downgraded its rating on the two stocks to 'neutral' from 'overweight', citing valuation levels.

Shares in French utility EDF fell 2.8 percent on worries over the prospect of a tie-up with loss-making nuclear group Areva. French Energy Minister Segolene Royal said on Monday all options were on the table regarding a link-up between EDF and Areva, including an outright merger.

French mobile operator shares came under pressure, with Orange shares down 5.7 percent and poised for their biggest one-day drop in more than 3 years after reports that Iliad may spark another price war in France. Iliad fell 4.1 percent while Numericable dropped 9.7 percent.